6.  The applicants were born in 1950, 1947 and 1943 respectively. Mr Stojko Arsovski and Mrs Verka Arsovska live in Kratovo and Probištip respectively.
7.  Since 1952 the applicants’ predecessor had title to a plot of land no. 1339, a pasture (“the plot”). On the basis of a gift contract of 1968 the plot in question was transferred into the possession of Mr Stojko Arsovski and subsequently into the possession of all applicants. In 1973 the State was recorded in the land registry, in error, as the owner of the plot. On 1 November 1977 the City Council of Kratovo authorised company S. (“the company”) to use the plot for an intensive agricultural development, but the company had never engaged in any such activity. On 17 April 1996 the applicants and Mr Milan Arsovski brought a civil action against the State seeking recognition of the title to several plots of land, including plot no. 1339. In May 1996 the then competent Ministry gave permission to the company to carry out geological research on the plot in question. On 19 March 2002 the Kratovo Court of First Instance (“the first-instance court”) upheld the applicants’ claim recognising their title to the plot in question. On 26 June 2002 the Skopje Court of Appeal confirmed the first-instance court’s decision of 19 March 2002 establishing that until then the claimants had always had actual possession of the plot.
8.  On 26 July 2002 the company requested that the State expropriate the plot in order for it to extract mineral water. In support of its request, it submitted, inter alia, a copy of a concession contract (договор за концесија) signed by the State on 8 May 2000 under which the company had been authorised to exploit geothermal mineral water in the plot for a renewable period of thirty years. The company undertook, in return, to pay certain compensation to the State (the compensation was twofold: a fixed annual amount and a percentage of the profits from the sale of the mineral water).
9.  On 9 December 2002 the Kratovo Office of the Ministry of Finance ordered expropriation of the plot so that the company could construct a pit to extract the mineral water. The expropriation order was based, inter alia, on sections 2 § 1 (6) and 3 § 1 (3) of the Expropriation Act (“the Act”).
10.  The applicants and Mr Milan Arsovski appealed against the expropriation order, arguing that the extraction of mineral water had not been specifically mentioned in any act or plan concerning the plot and that the applicable legislation had provided for partial, instead of for full, expropriation in the event of research into and exploitation of mineral resources, as in their case. In this connection they referred to sections 4 and 6 of the Act.
11.  On 2 June 2003 the Government Appeal Commission (“the Commission”) dismissed the appeal, finding that the company had submitted the required documents and that the exploitation of mineral water had been provided for in a decision of the City Council dated 1996. Relying on section 2 § 1 (6) of the Act, the Commission stated that the expropriation in the applicants’ case had been in the public interest. It further stated that the company, as the beneficiary of the expropriation, should pay compensation to the applicants.
12.  The applicants and Mr Milan Arsovski lodged an appeal with the Supreme Court on points of law, arguing that they had been deprived of the peaceful enjoyment of their possessions contrary to the Constitution and the Act. They complained that the Commission had not addressed their arguments that the company had not been entitled to request full expropriation of the plot, but rather only partial expropriation under section 4 (2) of the Act. In this connection they reiterated that a three-year lease contract, as provided for in section 6 of the Act, should have been applied instead of the full expropriation, which had entailed loss of the title to the plot, contrary to the principle of legal certainty.
13.  On 16 November 2005 the Supreme Court dismissed the appeal, finding no errors in the facts or law. Noting the applicants’ complaints, the court reiterated that the expropriation of the plot had been in the public interest, namely with a view to the construction of objects for research into and the exploitation of natural resources; that the company had submitted the required documents; and that compensation had been determined in non-contentious proceedings (see paragraph 16 below). The decision was served on the applicants on 9 January 2006.
14.  On 11 April 2006 the public prosecutor notified the applicants that there were no grounds to lodge a legality review request (барање за заштита на законитоста) with the Supreme Court.
15.  According to an extract from the Land Register of 7 May 2008, the company had title to the plot. According to another extract dated 31 December 2010, the respondent State was indicated as the owner (сопственик) of the plot and the company as the beneficiary (корисник).
16.  In the meantime, on 23 November 2004, the first-instance court determined, on the basis of an expert report, the amount of compensation which the company was required to pay to the applicants in return for the expropriated plot. The joint award was fixed at the equivalent of 880 euros (EUR). This figure corresponded to the market value of the plot determined on the basis of the following parameters: its location, size, the quality of the land, its suitability for construction, and access to a road and different installations. The expert report also contained information about the level of investment by the company in the plot regarding the exploitation of mineral water. The applicants were ordered to pay the equivalent to EUR 475 for the costs incurred by the company. The decision was confirmed by the Skopje Court of Appeal on 15 September 2005.
17.  Two individuals, one of whom was Mrs Verka Arsovska, one of the applicants in the present case, lodged an application with the Constitutional Court challenging the constitutionality of, inter alia, section 3 § 1 (3) of the Act. In an ex nunc decision of 11 February 2009 the court declared that provision unconstitutional, finding that although the State had a certain margin of appreciation in defining the public interest, it could not exercise it in a manifestly unreasonable way. In this connection it considered it insufficient that the Act simply enumerated the objects whose construction was regarded as being in the public interest. It further stated that the construction of objects in the interest of private persons, as defined in urban plans, could not always be construed as being in the public interest. Relying on Articles 8 § 1 (6) and 30 of the Constitution, it concluded that the State could expropriate a property only after other less restrictive measures, such as a long-term lease or concession (концесија), had been exhausted. To claim otherwise would mean that the commercial interests of private persons would prevail over the public interest. It concluded that
“... under the disputed provisions, a property may always and on every occasion, purportedly in the interest of the general public, be confiscated for the benefit of economically powerful recipients. This results in the minimisation of the interests of the owner and calls into question the right to possession safeguarded by the Constitution”.
18.  By a letter of 3 June 2011 the respondent Government communicated to the Court an article published on that day by Fokus, a weekly newspaper, in which a journalist, whose name was indicated as the author of the text, described the factual background of the case and discussed the possible business and political interests involved. The article noted that:
“... in the application, which the Strasbourg Court has accepted, the lawyers stated that the entire proceedings were contrary to the law ...”
19.  The article went on to say:
“After almost a decade, the Strasbourg Court will finally decide how much money the Macedonian State will be required to pay for unlawfully confiscating private property, allegedly in the public interest. The decision of the Strasbourg Court comes after an unsuccessful attempt at a friendly settlement between the owners of the land where the spring of Dobra Voda (the brand name of the mineral water extracted from the plot) is located, in the Kratovo region, and the Government – as required by the Court after a finding that the application was admissible and that the law had been violated ...
After they (the applicants) introduced the application, the Strasbourg Court informed them that it was admissible. It further ordered that the case be decided by means of a friendly settlement, that the amount of just satisfaction be determined, and that it would decide the case if the parties would not settle. On the basis of the Court’s instruction, the Government ordered an expert examination in order to determine the amount of just satisfaction. The expert proposed that the families be awarded EUR 1,600. It was clear that this proposal would not be accepted. Consequently, after it was submitted, the Strasbourg Court would assess how much the land with the source of mineral water was worth.”